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FORD vs TESLA – The Winner Takes It All

You may have seen this correlation uncovered by Bloomberg already two years ago comparing TESLA sales tracking FORD’s sales of the Model T:

What sets the two companies apart? 100 YEARS, or in other words: the individual car vs. a computer on wheels, the ICE engine vs. the electric drive, Grand Pa’s mean of transportation vs. the future of mobility, or in short old tech vs. new tech.

The price charts of the two companies also tell a tale of two diverging destinies.

TESLA INC. ( NYSE: TSLA ) has been on a tear since it first broke out from its 3-year long accumulation base in 2013, which was the ideal time to buy the stock. Another 3-year long consolidation stage happens to have just ended with a perfect breakout and retest pattern. The stock price is trending higher both on the long term (yearly) and intermediate term (weekly) charts with both a positive relative strength and rising volumes. If past history can serve as a guide another bull trend has now just started.

FORD MOTOR COMPANY ( NYSE: F ) on the opposite is in a long term (yearly chart) bear market. Everytime the stock price hit the upper triangle boundary on the weekly chart it has been sold heavily. With a negatively trending 30-week moving average, a weak relative strength compared with the broader market and declining volumes the risk is clearly for a break to the downside and rising pain for the stockholders.

Between the old monarch and the young prince the markets have clearly taken side and the winner takes it all. In this situation the strategy should be to buy $TSLA and to sell $F.

Disclosure: I have no position in the stocks mentioned.

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